Indonesia is the best-performing Asia-Pacific market so far this year

Indonesia's Jakarta Composite scale whitethorn person faced a mates of bumps successful the roadworthy successful 2022, but arsenic of Monday's close, it was the best-performing large Asia-Pacific scale for the year.

The scale is up 6.51% since the commencement of the year.

In contrast, the Hang Seng scale successful Hong Kong, South Korea's Kospi, and Taiwan's Taiex person plunged much than 25% this year.

Mainland China's Shanghai Composite and Shenzhen Component person besides been hammered, slumping by astir 17% and 27% respectively.

The Nikkei 225 successful Japan, India's Nifty 50 and the SET scale successful Thailand fared amended — notching azygous digit losses.

The Jakarta Composite scale fell sharply successful May and July earlier playing catch-up, and has stayed supra the 7,000 level since aboriginal August.

Foreign concern into stocks has driven the scale higher, and Indonesia is benefiting from higher commodity prices, according to Maynard Arif, caput of Indonesia equities astatine DBS Group Research. The Southeast Asian state is simply a commodity exporter.

Economic betterment determination has been connected the uptrend aft Covid restrictions were lifted, though developed economies experienced this boost earlier on, helium added.

"2022 net maturation connected [the] Indonesia marketplace stay robust, adjacent aft a large betterment successful 2021 from a debased base," Maynard told CNBC successful an email.

He added that DBS remains optimistic connected Indonesia, though it faces headwinds from involvement complaint hikes from the U.S. Federal Reserve and a beardown dollar — which person led to outflows for authorities bonds this year.

"The valuation whitethorn look costly [compared with] different countries but it tin beryllium justified fixed Indonesia's outlook and growth," helium said.

However, falling commodity prices are a root of uncertainty for Indonesia, said Manishi Raychaudhuri, BNP Paribas' caput of Asia-Pacific equity research.

"Given the diminution successful vigor prices … we counsel caution and a nimble-footed attack to the vigor assemblage successful particular, and to Indonesia successful general," helium wrote successful a study dated Sept. 28.

Elsewhere successful Southeast Asia, Singapore has a "large representation" of companies — specified arsenic banks — that payment from rising yields, said Raychaudhuri, adding that the state and India, Indonesia and Malaysia are "pockets of safety."

Suresh Tantia, a elder concern strategist astatine Credit Suisse, said tourer inflows are supporting the system and the marketplace aft it reopened.

Tantia besides said Credit Suisse prefers South Asia to North Asia markets for now, fixed the export-reliant quality of markets specified arsenic South Korea, Taiwan and China.

"South Korea and Taiwan, decidedly we could spot immoderate much pressure, export maturation slowdown, currencies stay anemic and we are seeing weakening request for spot assemblage also, which is precise important for these 2 markets," helium told CNBC.

Timothy Moe, main Asia-Pacific equity strategist astatine Goldman Sachs, said determination are 3 affirmative drivers for Southeast Asian markets.

Those see their delayed betterment from Covid, the emergence of a integer oregon "new" economy, and rising involvement rates.

"Asean markets typically person a precise precocious vulnerability to banks, and banks were not the spot to beryllium the past 10 years," helium told CNBC's "Street Signs Asia" connected Tuesday. "But they are now, with the involvement complaint rhythm turning, and truthful that's been a precise important tailwind for the Asean markets."

Taiwan has a batch of vulnerability to the slowing planetary system and besides experienced heightened geopolitical tensions with China.

The percent of overseas ownership of South Korea stocks, meanwhile, is astatine decennary lows, helium added. But that whitethorn mean the state is simply a bully campaigner for concern wrong North Asia, Moe added.

He pointed retired that South Korea doesn't person arsenic important geopolitical concerns arsenic neighboring economies and that its currency has sold disconnected this year.